After a decade of the Bitcoin launch there was not really much to celebrate because the prices had plunged to new lows, and many of the industry heavyweights and startups were starting to feel the pinch. The main factors which drive individual interest in cryptocurrency are volatility of market and mainstream adoption. However, neither of these two things was happening as the big coins flat-lined. Wall Street giants like Morgan Stanley shelved their plan to offer cryptocurrencies to clients. But, things started looking up as 2020 began.
- Decentralized Finance or DeFi as it is popularly called is a trend to watch out for in 2020. It offers multiple advantages and is likely to be the new breeding ground as far as innovations are concerned. Market operators like Babel Finance have started aiding miners to get more capital by using their crypto as collateral.
- Ethereum 2.0 has attained the final testing stage and teams who have spearheaded the development have paid heed to feedback from the community. This has produced a lot of trust and confidence around the new Ethereum blockchain.
- Crypto derivatives are expanding in size and accessibility. These were previously being offered by only a handful of exchanges like the BitMEX, but now most allow large-cap crypto assets. As more and more exchanges take the plunge, the market is expected to become more competitive.
- Lightning Network is a huge boon for crypto traders; this is a dual-layered payment protocol which can be implemented in any cryptocurrency that is blockchain-based. This will enable instant Bitcoin transactions. So, you can expect this year to witness establishment of additional nodes and channels on this Lightning Network system. Have a look at this bitcoin revolution review to know how the software performs.
- Privacy of transactions had been a cause of concern for the market. This has led to development of privacy tools; for example, Ernst & Young have come up with Nightfall to ensure private transactions in the Ethereum ecosystem.
- Finally, the crypto industry has been working relentlessly to resolve many of the problems that have affected cryptocurrency in general. So, new rules and custodial solutions are helping individuals protect their funds from hackers. Progress has happened in regard to regulations as market institutions have woken up to the realization that digital assets are valuable. As companies like JP Morgan start using their own currencies, it seems that even the big critics are now recognizing crypto potential. In June, Facebook Libra announcement shows this new wave of interest in crypto world. Even nations have shown interest in crypto coins; the Chinese went from banning purchase of crypto coins to endorsing the blockchain. Even in the US, political leaders and regulators softened their stands against the crypto and hinted at a possible digital dollar in the future.
So, the digital assets market appears to have grown considerably in the past year and the market has also diversified. Now, new trading facilities have emerged which enable adoption of more advanced strategies. Important products tailored to new investors and better market infrastructure are encouraging many traditional businesses to make an entry into digital currency.